Main legislative changes of July 2025

In the context of the recent amendments brought to the Fiscal Code by Law 141/2025 on the increase of the standard VAT rate and the redefinition of the reduced rates, a series of amendments have been made to correlate with the methodological norms of application. Access the tax alert regarding the changes in the fiscal-budgetary package.

Starting with August 1, 2025, the standard VAT rate is increased from 19% to 21% and a single reduced VAT rate of 11% will be applicable, being applicable to a limited number of goods and services, especially food.

The most important changes refer to:

• Clarifications have been made regarding the definition of food for human and food for animal consumption for which the reduced VAT rate applies.

• The list of food products eligible for the reduced VAT rate of 11% has been considerably reduced. Live plants, some raw materials and industrial or medicinal plants have been removed from this category.

• The reduced VAT rate applies to certain products such as powdered milk intended for newborns, infants and young children, while sponge cake or biscuits have been removed from the category of reduced products.

• For residues/waste from the food industry, salt and certain starch-based products, the reduced VAT rate applies only if the destination for human or animal consumption can be proven.

• Food supplements and new homes are no longer delivered with the reduced VAT rate, they are taxed at the standard VAT rate of 21%.

These provisions were approved by Decision no. 602/2025, published in the Official Gazette no. 715 of July 31, 2025.

2.     Amendments to Form 212 as a result of the first package of fiscal-budgetary measures

Starting with September 1, 2025, co-insurance is no longer free, and it is necessary to pay the health contribution (CASS) separately to obtain the status of co-insured. See in detail the changes brought by Law 141/2025.

In order to implement these changes, N.A.F.A. issued Order 1.929/2025, which updates both form 212 and the related instructions. The electronic version of the form is already available for the official N.A.F.A. website.

These provisions were approved by Order 1.929/2025, published in the Official Gazette no. 713 of 31 July 2025.

3.     Advance price agreement and mutual agreement procedure

The possibility was introduced whereby a taxpayer concluding an advance pricing agreement could request the extension of the retroactive validity of the agreement for transactions carried out in previous years, and amendments were made to art. 282 of Law 207/2015, which facilitates the amicable settlement of tax disputes at international level, by adapting the mechanisms agreed in double taxation avoidance treaties.

For more details regarding the advance price agreement and the amicable procedure, we invite you to access the tax alert.

These provisions were approved by Ordinance no. 11/2025 for amending and supplementing Law no. 207/2015 on the Fiscal Procedure Code, published in the Official Gazette no. 695 of July 24, 2025.